EDITORIAL: No-Fault Needs a Fix

Apr 14, 2007

By Detroit Free Press

Apr. 15--A 2004 Michigan Supreme Court ruling known as the Kreiner decision has prevented some motorists from collecting non-economic damages from drivers who caused their injuries. The state House has passed a bill, introduced by Rep. Paul Condino, D-Southfield, that would effectively undo the ruling.

It's a strong bill, and the state Senate should pass it, or at least a similar plan, to allow some victims of negligent drivers to collect for pain and suffering.

That said, politicians must honestly acknowledge the costs involved. Condino's bill almost certainly would raise Michigan's already high insurance rates. As they loosen restrictions on lawsuits and legal costs, legislators must find ways to offset increases in premiums and lower insurance rates, especially for urban residents.

The Kreiner ruling, named for Richard Kreiner, the 1997 victim of a crash caused by another driver, basically holds that only those who can show they have suffered injuries that change the "course or trajectory" of their lives can collect for non-economic damages.

The Michigan Court of Appeals has ruled against motorists in 85% of the post-Kreiner auto injury cases. Victims who've suffered permanent and life-altering injuries at the hands of negligent drivers have been unjustly denied compensation for the diminished quality of their lives, including pain and suffering, loss of social enjoyment and mental anguish.

"A large number of very seriously injured people are excluded," said George Sinas, the lawyer for the Coalition Protecting Auto No-Fault.

Sinas cites a 2003 case in which a 21-year-old woman, Krysta Gagne, had her knee permanently damaged in a crash with a drunken driver. She sued, but the Michigan Court of Appeals in 2006 upheld a lower court's decision to deny her diminished quality-of-life claim.

Industry analysts estimate that Condino's bill would raise insurance premiums in Michigan between 15 and 43 percent, said Peter Kuhnmuench, executive director of the Insurance Institute of Michigan. Critics call those estimates scare tactics. Still, Michigan's auto insurance rates, largely due to high mandated benefits and unlimited medical coverage, are already the ninth highest in the nation. Detroit residents pay possibly the nation's highest premiums. Shelling out $4,000 or more a year is not uncommon, making insurance practically unaffordable for low-income drivers. Even a 10% increase in rates would be calamitous, forcing more motorists to drive uninsured.

Relief might mean a radical and uncomfortable departure from past practices that have generally served the state well. Legislators must consider measures to control insurance costs such as fee schedules for medical providers, efforts to reduce fraud, and allowing insurance companies to offer limited medical and leaner coverage plans, as they do in other states. Legally restricting how much insurance rates could vary among ZIP codes would at least provide some relief to urban drivers.

Up to now, legislators have opted for easy but ineffective solutions. A plan to ban the use of credit scores, for example, is not necessarily a bad idea, but it won't lower overall rates or narrow the staggering disparities in premiums paid by urban and suburban residents.

Undoing the effects of the Supreme Court decision would enable more accident victims to get just compensation, but it also underscores the need for politicians to start taking real, and courageous, steps to control insurance costs.